Federal Appeals Court Blocks Union Funds’ Tobacco Suit

Philip Morris Cos. and other cigarette manufacturers fended off a bid by seven Pennsylvania-based union health and welfare funds to revive their effort to recover the costs of treating their members’ smoking-related illnesses.

The ruling in favor of tobacco companies, including R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Co., and Loews Corp.’s Lorillard Tobacco Co., marks the first time a federal appeals court has addressed the issue of whether union health and welfare funds are entitled to recover damages from cigarette makers.

“In the end, we conclude that the District Court correctly dismissed all of plaintiffs’ primary claims as being too remote from any alleged wrongdoing of defendants,” the U.S. 3rd Circuit Court of Appeals wrote Monday, upholding a lower-court ruling that dismissed the funds’ suit in 1998.

The Pennsylvania union funds’ suit is one of several filed nationwide that attempt to hold the tobacco industry liable for the costs of treating union members’ smoking-related illnesses. Earlier this month, a federal jury in Ohio concluded the tobacco industry could not be held liable for such damages in the first of the suits to go to trial.